There are several different types of Syracuse Real Estate auctions and rules for each. In this post we will address the most common Syracse Real Esate auctions you may come across. First I want to address how a property goes to auction. The first step is the homeowner either has not paid their mortgage or taxes. Second the bank will file a notice of default. If the homeowner doesnt pay the balance owed or renegotiate the loan the house can be put up for auction. So just from this paragraph we know that there are foreclosure auctions and tax auctions.
Foreclosure Auction- When the homeowner does not pay there mortgage for a certain amount of time. The bank will take the home over and try to resell (auction)
Tax Auction- When the homeowner does not pay there taxes for 3 years. The city/county will foreclose on the home and put the property up for auction (tax)
Ok, so now we know that there a 2 general categories where a house can be put to auction
1) Foreclosure
2) Tax
We can now discuss the Syracuse Real Estate auction methods. There are usually three types of auction methods or ways the auction will be run:
1) Absolute Auction- Property goes to the highest bidder
2) Reserve - Seller Reserves the Right to Accept, Reject or Counter Any Bid
3) Minimum Bid - Seller is Obliged to Sell At or Above the Minimum Bid
The absolute auction is the strongest message to the Syracuse market that the seller is committed to sell. This Syracuse real Estate auction is run similiar to an Ebay auction where they have a starting bid and they use the vehicle of auctioning to try and capure the market value of the home.
How can you evaluate a property that is going up for Syracuse Real Estate auction?
The fact that no information needs to be disclosed on the property that is being auctioned is the most difficult reason to buy from auction. They do not have to make you aware if the foundation is cracked, mold throughout the house or all the plumbing, electrical and HVAC needs to be replaced. So in some cases you are taking a shot in the dark with your purchase. Also if the property has any judgements or liens on the property you will be required to take on this price tag along with the purchase. This is why these auctions are risky and deals are possible.
Now there are some auctions where they do have open houses and allow you to walk through the properties to get an idea of what you are actually bidding on. You can also retain a list of properties that are going to be auctioned off and see if there are any in the area you wish to buy and you can drive by, look in the windows and see from the exterior what condition the home is in.
Dont get me wrong, you can get deals at auctions but if you do not have much experience in this avenue of investing. I advise to you be careful and try and obtain as much information on the property as possible.
Payment:
Depending on the auction, different payment avenues are required. You will need a cashiers check for the required amount of money requested by the auction holder. You will need to put down atleast 10% plus auction/bidding fees before leaving the auction site. So be sure to do some homework on the auction prior to showing up and looking to purchase. You will be required to have funds on hand to hold the property you purchased.
Conclusion:
If you're interested in trying to pick up a bargain property at auction, there's a lot to learn. Auctions can be a riskier way to purchase a property than buying a property through a real estate agent, so it's important to be extremely well-educated about the process and about the properties you are interested in bidding on. Also, just because a home is for sale at auction doesn't mean that you'll be able to get it at a good price (or that the home is a good deal at any price - it could be a money pit!). But for savvy, intelligent and motivated individuals, property auctions are worth exploring as a way to pick up a home or an investment property on the cheap.